View more on these topics

Newcastle ensures capital is safe

Newcastle Building Society has brought out a third issue of the capital safe bond, a guaranteed equity bond that is linked to the FTSE 100, S&P 500 and Eurostoxx 50 indices.

Investors can choose either a three-year term or a five-year term. Both products return the original capital whatever happens to the indices. Looking at the five-year version in more detail, any return on top of the capital is capped at 85 per cent of the average growth in the indices.

To calculate the final return, the starting level of each index is recorded on July 5, 2002 for both versions. This is compared with the monthly average for each index during the final 12 months of term.

Skipton Building Society&#39s guaranteed growth bond is linked to the same three indices as the five-year Newcastle bond but caps the growth above the capital return to 50 per cent of the increase in the indices. Although this is a lower than the 85 per cent offered by Newcastle, the Skipton Building Society guarantees a minimum return of 22 per cent. Newcastle&#39s bond does not guarantee a minimum return.

Some investors may prioritise higher growth potential and would go for Newcastle&#39s bond, while others may feel a guaranteed minimum return beyond the original capital. However, the Newcastle bond&#39s use of 12 month averaging shields investors from erratic stockmarket performance during the early years of the term. In contrast, the Skipton bond monitors index levels on a single date each year, which could be a disadvantage if this coincides with a downward swing.


Ice work if you can get it

M&G&#39s competition to win a snowmobiling safari in Iceland has been won by Gill Steele of Lodders in Stratford Upon Avon and Malcolm Dowsett of Malcolm Dowsett Financial Services in South Woodford, London.They both receive two return tickets to Iceland, three nights&#39 accommodation, a trip to the famous Blue Lagoon and the snowmobiling safari.The competition […]

Take the credit

My solicitor has told me that the court has made an order for me to share half my husband&#39s pension. What do I need to do now? Your share in your husband&#39s pension is known as a pension credit. This has been confirmed to me at £120,000. Your husband belongs to a final-salary contracted-out pension […]

Andy Halstead

For someone about to reinvent the direct salesforce, few people could have a more classic preparation than AMP advisory services sales director Andy Halstead. Before being poached to revitalise Pearl&#39s direct salesforce, Halstead put in the miles, wearing away the shoe leather as an agent for the Pru.One of last year&#39s big stories was the […]

Providers&#39 collective to bridge IFA funding gap

A collective investment company funded by providers could bridge the IFA funding gap without compromising adviser independence, according to Aifa.Both Aifa and Sofa have held discussions with providers looking at how to provide capital to the IFA sector while avoiding being seen to influence advisers.Removal of the better than best rule would allow single providers […]

The Downsizing Delusion: Why relying exclusively on your home to fund your retirement may end in tears

By Steve Webb, director of policy The British obsession with homeownership can have dangerous consequences. A recent survey by Barings¹ found that up to three million people of working age were planning to rely wholly on the value of their home to fund their retirement. We are not talking about people investing in buy-to-let or […]


News and expert analysis straight to your inbox

Sign up


    Leave a comment


    Why register with Money Marketing ?

    Providing trusted insight for professional advisers. Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and thought leadership.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm